Barnes v. Sea Hawaii Rafting, LLC et al

Filing 540

DIRECTIVE TO THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF HAWAII "In light of the foregoing, the Court requests clarification of the Memorandum of Decision regarding whether, at this time, the automatic stay still bars Plaintif f Barnes from prosecuting unsecured in personam claims against Defendant Henry." Signed by JUDGE ALAN C. KAY on 3/18/2019 (jo)COURTS CERTIFICATE of Service - United States Bankruptcy Court served electronically. Non-Registered CM/ECF Participants will be served on March 19, 2019, by First Class Mail, to the addresses of record listed on the Notice of Electronic Filing (NEF)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAI`I
)
)
)
Plaintiff,
)
)
v.
)
)
SEA HAWAI`I RAFTING, LLC;
)
KRIS HENRY; ALOHA OCEAN
)
EXCURSIONS, LLC; JOHN
)
DOES 1-20; MARY DOES
)
1-20; DOE CORPORATIONS
)
1-20; DOE PARTNERSHIPS
)
1-20; DOE ASSOCIATES
)
1-20; DOE GOVERNMENTAL
)
AGENCIES 1-20; AND OTHER
)
ENTITIES 1-20, in personam;
)
AND M/V TEHANI, HA 1629-CP,
)
AND HER ENGINES, EQUIPMENT,
)
TACKLE, FARES, STORES,
)
PERMITS, FURNISHINGS, CARGO
)
AND FREIGHT; DOE VESSELS 1-20,)
in rem.
)
)
Defendants.
)
)
CHAD BARRY BARNES,

Civ. No. 13-00002 ACK-RLP

DIRECTIVE TO THE UNITED STATES
BANKRUPTCY COURT FOR THE DISTRICT OF HAWAI`I
On May 21, 2018, the bankruptcy court issued its
Memorandum of Decision on Motions for Relief from Stay and
Barton Doctrine and for Sanctions (“Memorandum of Decision”).
Bankr. Case No. 14-01520, Dkt. No. 300.

The bankruptcy court

denied Plaintiff Chad Barry Barnes’s (“Plaintiff Barnes”)
request for the bankruptcy court to lift the automatic stay of
in personam claims against Defendant Kris Henry (“Defendant
1

Henry”) for several reasons, including that Plaintiff Barnes
committed a procedural error by filing his motion to lift the
stay in Defendant Sea Hawai`i Rafting, LLC’s (“Defendant SHR”)
bankruptcy case and not in Defendant Henry’s bankruptcy case.
See Memorandum of Decision at p. 13; Bankr. Case No. 14-01475.
On May 21, 2018, Plaintiff Barnes appealed the
bankruptcy court’s Memorandum of Decision.
01520, Dkt. No. 301.

Bankr. Case No. 14-

The appeal was docketed in the district

court as Civ. No. 18-00199 JMS-RLP.

On March 7, 2019, Chief

Judge Seabright issued an Order Dismissing Appeal in Part, and
Affirming May 22, 2018 Decision of Bankruptcy Court in Part.
Civ. No. 18-00199 JMS-RLP, ECF No. 24.

Chief Judge Seabright

ruled that the “[i]ssues regarding in personam claims against
Kris Henry and/or his bankruptcy estate are not properly before
the court in this appeal—that is, the current proceeding is
limited to an appeal from a decision in In re Sea Hawaii
Rafting, LLC, Bankr. Case No. 14-01520, not in In re Kristin
Kimo Henry, Bankr. Case No. 14-01475.”

Id. at p. 3.

In light of the foregoing, the Court requests
clarification of the Memorandum of Decision regarding whether,
at this time, the automatic stay still bars Plaintiff Barnes
from prosecuting unsecured in personam claims against Defendant
Henry.

The Court notes that Plaintiff Barnes seeks to pierce

the corporate veil and hold Defendant Henry personally liable
2

for Defendant SHR’s maintenance and cure obligations, 1 as well as
pursue other tort claims against Defendant Henry.

The Court

also notes that it appears claims for maintenance and cure may
be exempt from the automatic stay imposed by the Bankruptcy
Code.

See In re Sea Ray Marine Servs., Inc., 105 B.R. 12

(Bankr. E.D. La. 1989); see also In re Coltellaro, 204 B.R. 640
(Bankr. S.D. Fla. 1997). 2/

1/

On October 5, 2018, the Court issued Amended Findings of Fact
and Conclusions of Law in which it held that Defendant SHR and
the vessel M/V Tehani were obligated to pay Plaintiff Barnes
$279,406.12 in maintenance and cure. ECF No. 446 at p. 45.
2/ In this case, the court held that an award of maintenance and
cure was an exempt asset under 11 U.S.C. § 522(d) and therefore
not part of the debtor seaman’s bankruptcy estate. In re
Coltellaro, 204 B.R. at 643-44. In reaching this holding, the
court found that maintenance and cure is analogous to workers’
compensation and therefore falls within the “disability,
illness, or unemployment benefit” exemption of 11 U.S.C. §
522(d)(10)(C). Id. at 644. The court further found that
maintenance and cure, like alimony, is a form of support or
separate maintenance “reasonably necessary for the support of
the debtor” and therefore also exempt under 11 U.S.C. §
522(d)(10)(D). Id.
3

IT IS SO ORDERED.
DATED:

Honolulu, Hawai`i, March 18, 2019.

________________________________
Alan C. Kay
Sr. United States District Judge

Barnes v. Sea Hawaii Rafting, LLC, Kris Henry, M/V Tehani, et al., Civ. No.
13-00002 ACK-RLP, Directive to the United States Bankruptcy Court for the
District of Hawai`i.

4